Fellow Fool Rich Smith recently talked about how Wall Street's Canaccord Genuity has upgraded the Denver-based company and placed a price target of $12.50 on the stock. Rich also points out that at 53 times, the trailing P/E doesn't exactly look attractive when compared to the likes of ExxonMobil, whose shares trade at a little over 10 times its earnings.

But the big question is: Does the current valuation look discouraging, or are we going to witness some solid growth in the next couple of years? I believe it's the latter. Here's why:

Hitting the ground running in 2012Between mid-October and January, Kodiak completed eight gross operated wells, with the initial 24-hour production test averaging 1,682 barrels of oil equivalent per day. In addition, it has a working interest in five non-operated wells in Dunn County that have been completed but whose performances are yet to be disclosed. Thanks to the Williston Basin acquisition, the company ended January with a production rate of about 15,000 Boe/d -- up from 10,100 Boe/d at the end of 2011. That's nearly a 50% production hike in one month's time. Yowza!

AmbitiousAs a result of the acquisition, Kodiak has contracted for a seventh rig, which is scheduled to be delivered in the second quarter this year. Management now aims to develop its entire 155,000 net acreage in Williston by mid-2013, thereby eliminating a possible expiry of its leasehold due to non-production from the properties. Now that's where I'm expecting massive production growth to take place.

Capital expenditure for 2012 is pegged at $585 million -- a whopping 133% growth from last year's spending. Kodiak expects to drill 73 gross (51 net) wells, with a full-time 24-hour frac crew already in place. It's also heartening to see that the company is setting aside $25 million for investments in infrastructure. This enables seamless connectivity to Enbridge's (NYSE: ENB) network of pipelines once production volumes mature.

Foolish bottom lineJudging by the figures, Kodiak's production should witness strong growth in the next couple of years. I wouldn't base my investment decision on its current valuation. The overall market, I believe, is yet to factor in these exciting prospects, simply because it's uncharted territory for the company. Investors must watch this company like a hawk. In order to stay up to speed on the top news and analysis on Kodiak, you can start here by adding the company to your free watchlist.